- Distressed-debt specialist Steve Kuhn of Pine River Capital looks to equity for one his picks - American Capital (ACAS). Left for dead during the financial crisis (the stock's more than a 20-bagger since the March 2009 low), the BDC has revived itself using massive tax-loss-carry-forwards to shelter income and buy back gobs of shares at a big discount to book value, rather than paying a dividend.
- This lack of dividend puts the name in many investors' penalty boxes even though it makes good sense, says Kuhn. The stock's a double over the next three years, he says, when the tax shield runs out and the company resumes a payout on a vastly reduced number of shares.
- ACAS repurchased about 13.4M shares (4.6% of the float) in Q3 at an average price of $13.11 vs. June 30 book value per share of $19.28.
- Nelson Peltz again declares Mondelez International (MDLZ) poorly run, with a bloated cost structure compared to peers holding the stock back despite wonderful brands, little private-label competition, and a big footprint in fast-growing emerging markets. Operational changes could boost the profit margin 600 basis points to 18%, he claims, allowing a doubling of EPS by 2015. Also: Dump the company name - it sounds too much like a medicine.
- Marc Lasry doesn't think J.C. Penney (JCP) is headed for bankruptcy and likes the company's unsecured debt trading at 65 cents on the dollar. September's $800M equity offering gives Penney the necessary cash to get it through 2015 when, says Lasry, new management - by returning to JCP basics - should have the company profitable again.
- Full article from Barron's.
From other sites
at CNBC.com (Feb 19, 2014)
at CNBC.com (Oct 18, 2013)
at CNBC.com (Aug 20, 2012)
at CNBC.com (Apr 16, 2012)
at CNBC.com (May 2, 2011)
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